Italy's League says parliament will have final say on EU defence funds

By Giuseppe Fonte and Angelo Amante

ROME, July 28 (Reuters) - Italy's League party, a member of the ruling coalition, said on Tuesday that any decision on whether to tap a European Union scheme to fund military spending would be up to parliament, after the foreign minister said Rome was ready to access the programme.

The Security Action for Europe (SAFE) instrument is a joint borrowing scheme backed ​by the EU budget to boost the bloc's defence capabilities and ⁠help member states meet new, more ambitious NATO spending targets.

Foreign Minister Antonio Tajani, leader of the co-ruling Forza Italia party, told parliament that the government had decided to request €14.9 billion ($16.9 billion) by the end of the year, reversing suggestions that Rome could drop the programme.

His comments triggered a swift reaction from his League allies, who repeatedly urged caution on any decision to access the scheme.

"It will be up to parliament to decide if and when to use that funding channel," said League senator Claudio Borghi.

Tajani clarified that Italy had merely "reserved" the funds and that the government will determine by the end of the year how much, if any, to demand.

PRESSURE FOR ACTION ON ENERGY COSTS

Raising defence spending is highly unpopular in Italy, where Prime Minister Giorgia Meloni is under pressure from the opposition to use her limited budget leeway to soften rising energy costs.

Italy said in May it might not be able to honour its commitments to boost defence spending and use the SAFE scheme without more lenient budget rules from Brussels on energy spending.

However, the government has now secured the right from the EU to use part of the "national escape clause" from the bloc's budget rules to help cover energy costs.

Economy Minister Giancarlo Giorgetti said on Monday the government would next week seek approval from parliament to tap the clause's provisions, a move that would allow Italy to post higher deficits through 2028.

Defence Minister Guido Crosetto told parliament that Italy would use the SAFE scheme to fund defence projects already included in its budget, rather than increase military spending. He also hinted that Rome could end up requesting only around half of the funds to which it is entitled.  

($1 = 0.8796 euros)

(Reporting by Giuseppe Fonte and Angelo Amante; Editing by David Holmes)